Why Analysts Are So Negative On Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)?

Posted by Lynn Eisler January 13, 2014 0 Comment 2430 views


Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), a company that focuses on the development of medicines for cancer treatment, has seen its stock falling due to recent developments. The company has even garnered some negative status by analysts. Ariad’s Iclusig (ponatinib) return to the U.S. market may come as positive news for the company, but the re-launch is expected to be challenging too, as it’s going to come with restricted label and some warning keeping the safety issue in mind.

The FDA has allowed the company to bring the leukemia treating drug back in the market. Iclusig received approval for treating chronic myeloid leukemia as well as Philadelphia chromosome positive acute lymphoblastic leukemia about a year ago. But on October 31, the drug was disapproved for further use by FDA over some safety concerns, as the drug was reported to cause life threatening risks.

Now that the Iclusig is re-approved, it will contain a revised label that will warn patients of potential vascular blockages which may lead to heart attacks, strokes or even death. It further mentions that such effects have been observed in as much as 27% of the patients treated with the drug.

The pharmaceutical firm recently was downgraded by Citigroup Inc. and was given a “sell” rating from the current “neutral” rating. They currently have a $5.50 price target on the Ariad stock. A number of other analysts have also issued their guidance on Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) stock. Thomson Reuters downgraded Ariad Pharmaceuticals shares from a “hold” rating to a “sell” rating on December 24, 2013.

In addition, Bank of America Corp. reiterated an “underperform” rating on the company’s shares, giving a $3.00 price target on the stock. Credit Suisse analysts reiterated a “neutral” rating on Ariad shares with a $5.00 price target on the stock. About 16 analysts have rated the stock with a “hold” rating, five have given it a “sell” rating, and four have issued a “buy” rating to the company. On an average, Ariad Pharmaceuticals has a “hold” rating and $6.86 as an average price target.

On the other hand, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) said it will present at the 32nd Annual J.P. Morgan Healthcare Conference being held in San Francisco. CEO Harvey J. Berger will provide an overview of the Company’s business on January 14, 2014.


About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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